Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what consultation was undertaken with employers prior to the decision to increase the Approved Mileage Allowance Payment rate from 45p to 55p per mile: and what assessment was made of the financial impact on employers that had already implemented annual pay awards before the change was announced.

The Government’s decision to uprate the Approved Mileage Allowance Payment and simplified expense rates for 2026/27, the first uprating of these rates since 2011, is in recognition of the pressures facing drivers as a result of the effects of the Iran war. The government maintains regular engagement with stakeholders, including employers and firms offering payroll services across matters of tax.

The Government welcomes those employers who better reflect the cost of driving for employees who need to use their car for their job. The AMAP rate is advisory, so it is therefore ultimately up to employers to determine the rate at which they reimburse their employees. Employees who receive less than the AMAP rate can claim tax relief on the difference.

As with all taxes, the Government welcomes representations. Looking ahead and beyond 2026/27, the Government has already committed to a review of these rates and will set this out at the Budget.